Dan Hodges is a former Labour Party and GMB trade union official, and has managed numerous independent political campaigns. He writes about Labour with tribal loyalty and without reservation. You can read Dan's recent work here

The Chancellor spoke for the best part of an hour; the Shadow Chancellor for just over 11 minutes. But the key part of the debate came in the instant just before George Osborne rose to deliver his reply. Osborne is not a confident performer at these events. His voice is too weak to really command the chamber. He was also delivering some pretty bleak economic news. He had to acknowledge that the Government had again missed its borrowing targets and was unveiling some tough public service cuts.

But he was relishing the moment. He couldn’t wait to spring back to his feet. Why wouldn’t Ed Balls just come out and tell the truth, he asked? Despite all the attacks on him and the Prime Minister, why was Ed Balls not prepared to say what he wanted to say, namely that despite borrowing spiralling out of control, Labour wanted to borrow more? He had a simple question: the Government’s spending plans had just been unveiled to the last penny – did Labour want to match them, or did it want to exceed them?

Leaning casually against the dispatch box, the Chancellor opened the question out. Would those Labour MPs happy to match the Government’s spending plans please raise their hands? No? Of course not, he laughed. They couldn’t. They were a party in no-man’s land. (Nice line).

Watching the contrast between Ed Balls demeanour, and that of his great rival, was instructive. Balls' favourite party trick is to sit at PMQs telling David Cameron to calm down, then winding him up by taunting him about going red in the face. But there were times when Balls was hammering his way through his checklist of Government failures that he started to look like the PM just after an especially gruelling meeting with Peter Bone. Frustration and resentment were etched on his face.

I suspect that’s because deep down Ed Balls is aware of how fast things are now slipping away from Labour. To be fair, he’s done a manful job over the past three years of keeping Labour in the game, and many of his economic predictions have proved prescient. But watching him this afternoon, he reminded me of one of those British soldiers in the film Zulu. He’s put up a brave fight, but his defences are finally, and inevitably, starting to crumble.

As George Osborne took great relish in pointing out, Labour had mocked the Tories for claiming the private sector would make up for the loss of private sector jobs. But the private sector had done just that. Labour had claimed the higher education reforms would act as a barrier to students from poor income families. In fact, record numbers of poorer students were attending university. Labour had claimed the cuts to local government would lead to a collapse in services. In truth, public confidence in local authority service provision was rising.

And then of course there was the economy. The economy was finally “moving out of intensive care – and from rescue to recovery”, Osborne said. Ed Balls laughed at that, but he won’t have been laughing inside. “The economy is on the right track, don’t let Labour wreck it”, is the slogan that could kill Labour in 2015.

The bizarre irony is that the one area where George Osborne was seriously vulnerable was the one area Ed Ball’s simply couldn’t exploit. As the Chancellor was on his feet Sky News kept cutting away to a debt clock in their studio that was ticking remorselessly upwards. But Labour’s “the government is borrowing too much, we’d borrow more” line means the deficit denial tag is now hung round their neck for good.

George Osborne’s words implied a hard political road ahead for the Government. But his body language told a different story. The Chancellor believes the political and economic cycles are slowly moving into alignment. And he also believes there isn’t anything Ed Balls or Ed Miliband can do about it.